Income tax query

DebtClearer

Guys I couldn't find a section for this so would be grateful if anyone can help. I do not understand income tax and the tax office just confuse me more. Anyway I will explain...

Point 1) In Jan 2011 in worked for Company A and was given a company car. I barely did any business miles in this due to the role being a bit of a joke and not really existing. Anyway I had this car until October 2011 when I resigned and started my current job. I think I only made one payment of £100ish in September 2011 towards this car. I didn't know I was meant to tell the tax office and I don't think my company told them either.

Point 2) When I started at my new company in October I was on tax code 747L, earning £23,400 (I since learned this 747L is a temporary tax code?). This continued until my March pay. In April I recieved a taxable £500 bonus. However I barely saw any of it, my tax code changed to 13L. Just looked at my May pay and I am still on 13L even without bonus and my monthly pay has reduced net by £140.

Point 3) I rang tax office and they were just confused. He said he thought I would owe some car tax from the last financial year however this wasn;t yet being collected. He then move me on to a new tax code 548L. All my colleagues who earn the same as me are on 810L and I have been told I should be on the same. Really confused....I'm aware I owe something on the car but I'm totally confused about the tax code I should be on and what I am actually owed. I don;t know how best to deal with this and get things in order.

Anyone who understand tax and can see what may have happened here I would really appreciate your advice!

[Deleted User]

There is a tax forum if that helps

withabix

Have you got your 2010/11 P60, your P45 from job A, your Notice of coding for 2010/11, 2011/12 and 2012/13?

You need to start off with those.

Tixy

810 is the basic code for people with no tax arrears from previous years and no taxable benefits in the current year (there are all sorts of other reasons it can change but these are the common ones and look to be the relevant ones here).

If you owe tax from last year this is often corrected in the following years tax computation - ie they take a small amount of it back from you each payday - by making you pay slightly more tax.

To go from 810 down to 13 suggests that you have £7970 of either tax owed from last year, or taxable benefits this year.

When you got the company car your employer should have informed the tax office (they should do it straight away, its not uncommon for them not to do so until July when they complete p11ds).

So if you got the car in Jan 11 then you would normally expect your tax code to drop down a month or so later to a lower figure.

Exactly what the tax value of the car was for the period you had it will depend on what car and what CO2 emmissions and whether you paid the employer anything towards the car and whether they paid for your private fuel.

Your 2012/13 notice of coding (which you will have been sent in probably Feb/Mar this year) should explain how they get from 810 'normal' tax free allowance, to '13'.

DebtClearer

There is no way I owe over £7k tax on the car, I only had it for 9 months! A friend has told me they think I may be on 13L at the start of this financial year as they have seen my £500 bonus and now think I am going to earn that kind of money over the whole year. Would this explain it? If I have been paying on the 747L code since October then in theory I am being taxed higher than the 810L code I should be on?

So ultimately I need to get a rebate for overpaid tax since I started this new job in October and then start paying off this company car outstanding tax?

Thanks for help guys, I'm really stuck with this.

withabix

Tixy wrote: »

To go from 810 down to 13 suggests that you have £7970 of either tax owed from last year, or taxable benefits this year.

Not £7970 of tax owed.

TAX on £7970 owed.

withabix

HMRC won't 'see' your bonus.

You need your Notice of Coding. See what the breakdown is on there.

If you've got a company car and a fuel card with private fuel included, you could quite easily have a code of that level.

What car is it (make/model/engine size)?

Do you have a fuel card?

Tixy

withabix wrote: »

Not £7970 of tax owed.

TAX on £7970 owed.

Oops. I knew I was tired last night.
Of course - tax on £7970.